McKesson Brings in the Big Money

And the healthcare services firm could rise even more due to strong demand and growth prospects. But another likely reason is Big Money lifting the stock.

Big Money Drawn to McKesson

So, what’s Big Money? Said simply, that’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.

Smart money managers are always looking for the next hot stock. And McKesson has many fundamental qualities that are attractive.

This sets up well for the stock going forward. But how the shares have been trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares.

You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.

That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the Big Money signals MCK has made the last year.

The last few weeks have seen Big Money activity too. Each green bar signals big trading volumes as the stock ramped in price:

Source: www.mapsignals.com

In the last year, the stock attracted 27 Big Money buy signals. Generally speaking, recent green bars could mean more upside is ahead.

Now, let’s check out technical action grabbing my attention:

Outperformance is important for leading stocks.

McKesson Fundamental Analysis

Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, McKesson has been growing sales and earnings at big clips. Take a look:

  • 1-year sales growth rate (+10.8%)
  • 3-year EPS growth rate (+1,048.8%)

Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, MCK has been a top-rated stock at my research firm, MAPsignals, for years. That means the stock has buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

MCK has a lot of qualities that are attracting Big Money. It’s made the Top 20 report 18 times since 2000, with its first appearance on 09/18/2000…and gaining 1,036.4% since. The blue bars below show when McKesson was a top pick:

Source: www.mapsignals.com

It’s been a top stock in the health care sector according to the MAPsignals process. I wouldn’t be surprised if MCK makes additional appearances in the years to come. Let’s tie this all together.

McKesson Price Prediction

The McKesson rally could have further to go. Big Money buying in the shares is signaling to take notice. Shares could be positioned for further upside, plus it pays a current dividend of nearly 0.6%. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio.

Disclosure: the author holds no positions in MCK at the time of publication.

Learn more about the MAPsignals process here.

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Drug Distributors Settle New York Opioid Claims for Up to $1.18 Billion

By Brendan Pierson and Nate Raymond

McKesson Corp, Cardinal Health Inc and AmerisourceBergen Corp settled as state attorneys general prepare to announce as soon as this week a landmark $26 billion deal with the distributors and drugmaker Johnson & Johnson resolving cases nationwide.

The deal with New York Attorney General Letitia James and the populous Long Island counties of Nassau and Suffolk came three weeks into the first jury trial accusing companies of profiting from a flood of addictive painkillers that devastated communities.

“While no amount of money will ever compensate for the millions of addictions, the hundreds of thousands of deaths, or the countless communities decimated by opioids, this money will be vital in preventing any future devastation,” James said.

Hunter Shkolnik, a lawyer for Nassau County at the law firm Napoli Shkolnik, in a statement said that unlike the proposed national settlement, the New York deal “is not contingent on the rest of the country or other states joining.”

In a joint statement, the distributors called the settlement “an important step toward finalizing a broad settlement with states, counties, and political subdivisions.”

Nearly 500,000 people died from opioid overdoses in the United States from 1999 to 2019, according to the U.S. Centers for Disease Control and Prevention. And the crisis appeared to have worsened during the COVID-19 pandemic.

The CDC last week said provisional data showed that 2020 was a record year for drug overdose deaths with 93,331, up 29% from a year earlier. Opioids were involved in 74.7%, or 69,710, of those fatalities.

Justice Jerry Garguilo, who is presiding over the trial in Central Islip, on Tuesday morning granted a request by lawyers for the state and counties to drop the distributors from the case, without discussing the terms of the deal.

The New York trial will continue against three drugmakers accused of deceptively marketing their painkillers – Endo International Plc, Teva Pharmaceutical Industries Ltd and AbbVie Inc’s Allergan unit.

Ahead of the trial, Johnson & Johnson agreed to pay $263 million to resolve the claims by the state and counties. Pharmacy operators Walgreens Boots Alliance Inc, CVS Health Corp, Rite Aid Corp and Walmart Inc agreed to settle with the counties for a combined $26 million.

James’ office said that of the nearly $1.18 billion the distributors agreed to pay, more than $1 billion will go toward addressing the epidemic. The counties have said the money will be used for mental health and addiction programs.

Payments will start in two months and will continue over the next 17 years, James said.

More than 3,300 cases have been filed largely by states and local governments alleging drugmakers falsely marketed opioid painkillers as safe, and distributors and pharmacies of ignoring red flags that they were being diverted to illegal channels.

The companies have denied wrongdoing, with drug distributors saying they maintained anti-diversion programs and drugmakers noting their pain medicines had U.S. approval and labels that warned of the known risks of opioids.

Two other opioid cases are also on trial in West Virginia and California. Those cases will be decided by judges, with closing arguments in the West Virginia case expected next week.

(Reporting by Brendan Pierson in New York and Nate Raymond in BostonEditing by Tom Hals, Chizu Nomiyama, Bill Berkrot and Nick Zieminski)